Wipro’s muted guidance for the first quarter of 2016 fiscal has raised a possibility of another year of revenue growth in single digits.

Analysts pointed out that the muted first quarter guidance in the range of $1.76-1.79 billion, which is -0.5 per cent to +1 per cent over March quarter for its IT services business. The outlook has taken them by surprise. “This implies that it might be another year of growth in single digits (in constant currency terms),” said Ashish Chopra, IT analyst with Motilal Oswal.

Apart from currency volatility, there were a couple of factors that played out during the quarter — slowdown in its energy vertical and some challenge in BFSI, more specifically in the insurance sector. Wipro has high exposure to companies in the energy vertical, which have seen their business impacted due to fall in oil prices. In the fourth quarter, energy vertical contributed 15.5 per cent to its revenues, down 3.2 per cent on a constant currency basis.

Jatin Dalal, CFO, pointed out that the company did not anticipate this kind of impact but was bullish that this is also an opportunity as companies will look to consolidate their IT ecosystem. Addressing analysts, T K Kurien, CEO, said that BFSI is seeing some slowness in spending which is yet to pick up. “This weakness is reflected in the guidance too,” according to Sandip Agarwal, IT analyst, Edelweiss, who added that they have cut growth estimates to 8.3 per cent from 13 per cent earlier. This is lower than Nasscom’s annual estimates for 2016 financial year, which expects the Indian IT industry to grow in the range of 12-14 per cent.

Then there is the healthcare and lifesciences vertical, which now contributes 11.7 per cent to its revenues, estimating it to be an $800 million business is yet to hit the billion dollar mark, which the company has been targetting since September 2011 when this vertical had a topline of $450 million.

Further, some of the analysts have also decided to trim Earnings Per Share estimates. “For FY16, we are reducing EPS by 1.3 per cent,” said Madhu Babu, analyst at Centrum Broking.

However, Kurien is confident that investments made in technology areas like automation and AI, creating a 350 member team in this area, coupled with non linear growth backed by Wipro Ventures will start to gain momentum in the 2016 financial year.

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